Everything you need to know about buying property in Majorca as a foreigner
Most of the foreign investors coming to our offices in Majorca have many of the same questions regarding how to buy a house on the island
TOP TIPS ON BUYING PROPERTY OVERSEAS
Sol Mallorca Real Estate. Ref: A1834
If you are looking into buying property abroad this year, maybe a second home in the sun, a holiday pad, a place to retire, or even a new residence, whatever the reasons for purchasing real estate, doing it abroad will give you a whole new breed of questions and things to think about.
First of all there is the question of where you will buy the property, what country, where in the country and then there is the small issue of removals. But aside from all this, there is the added conundrum of moving money, paying mortgages, making payments abroad.
HOW TO BUY YOUR NEW HOUSE IN MAJORCA
With the British topping the list of foreign buyers investing in Spanish property at a massive 21%, with about 13% of all transactions bought by foreigners and up again from last year, this has been a great year!
Most of the foreign investors coming to our offices in Mallorca have many of the same questions regarding how to buy a house on the island.
Not even Brexit seems to have slowed the flood of interest, and we are seeing more and more UK nationals and northern Europeans settling part or full time on the island, buying holiday homes, investing in rental villas and reforming for retirement. Though their reasons for buying a house may differ, the ins and out of the purchase process remains the same, as do the requirements, so we have compiled a simple list of the most important things you need to know as a foreigner buying property in Majorca.
LOOK AT GLOBAL MARKET TRENDS
Research is vital at this point in the game. You will need to thoroughly study global market cycles to see where is a good place to invest at the moment. House prices may be down in one place and going up in others. Obviously, you want to buy property while house prices are low and on their way up!
If you have set your heart set on somewhere specific already, like say Majorca, then you should research the local market. See how much house prices differ between areas.
In the case of houses, size really does matter, and the size of the property you buy will not only affect the purchasing price, but cost you more in the long run too. Think staff, gardeners and pool maintenance. So, be realistic about how much house you actually need. Are you sure you should be buying that gorgeous 6 bedroom villa? It may well be a great deal and it is truly spectacular, but there are only 2 of you and the grandchildren may not spend every single summer with you. You will enjoy your new home a great deal more if you buy it to suit you and within your budget.
PLAN A VIEWING TRIP
Some people try to combine finding a house with a family holiday.
We suggest you don't.
Dedicating time to property viewings, getting to know the area, researching the neighbourhood amenities, distances to airports, and generally getting a sense of the houses you are interested in is going to help you make an informed choice. Skimping on viewing times will inevitably come back to haunt you when you find out you have made a rash purchase.
RESEARCH THE LIFESTYLE IN MAJORCA
Lifestyle and cost of living may not be apparent at first, and especially not if all you know of the island is based on a couple of weeks spent on holiday in the summer.
For one, the weather will change and I guarantee you won't believe Majorca in winter.
If you are planning on using your new home uniquely as a holiday place, then it doesn't matter that much. It will always be scorching hot in July and August!
The cost of living is often overlooked. If your new home is going to need maintenance, you may want to look into the costs of this, as well as average shopping prices, cost of eating out, car ownership, or rental, etc. You don't want to end up skimping because you didn't do the maths.
Though there are a few possibilities to buy a new build in Majorca, it is more likely you will be buying a townhouse, villa or apartment that need to be reformed or refurbished.
Look into the costs of this and make a plan about how you envisage running the project. Will you hire a manager to keep an eye on the work or oversee it yourself?
Can you get building permits? How much will this cost and how long is it likely to take?
What DOCUMENTATION do you need to buy property in Majorca?
In one word : NIE
Numero de Identidad de Estrajeros which means Foreign Identity Number.
This is a unique and personal number assigned to you.
You can collect your NIE in person at the local Spanish Immigration Offices. In Majorca they are found in Palma, the city capital, in the Estranjeria building. You can also ask a government representative or Gestor, to process your NIE for you. If you are not currently on the island and need to get a NIE, you can do it online.
When you buy a house through a real estate agent, they will often be able to help you with the NIE process.
RESIDENCY AND TAXES IN MAJORCA - SPAIN
Where you keep your residency, and where you pay your taxes goes hand in hand.
But can you keep your residency elsewhere if you are buying property in Majorca?
And where will this mean you have to pay TAX?
In Majorca (and all over Spain) there is the IRNR tax which is an income tax for non residents levied on income earned in Spain. This means that if you live in Spain for more than 183 days per year you are considered an habitual resident and your personal income will be taxed.
GETTING A BANK ACCOUNT
At present 3 Spanish banks offer mortgages to non-residents; Banco Sabadell, Banco Popular and Banco Santander, while CaixaBank allows non-Spanish nationals to open an account.